It seems like after you buy something at point of sale whatever you do with it is fair game. I can buy Coke from Sam's Club or Costco and sell it in my restaurant. How is what Pirate Joe's did any different?
Usually it doesn't work to buy products at full retail price and resell them at a higher retail price. I guess the "in Canada" part is how it worked out for him?
Trader Joe's probably wants to protect their brand in hopes of a future Canadian expansion.
In capitalism, Pirate Joe's could open up right next door to Trader Joe's and charge whatever prices they like for the products purchased next door.